Deck 5: Corporate Level Strategy

Question 1

According to the textbook, the issue of corporate configuration could be 'translated' in the following paradox:
A.Multi-business vs.core business
B.Responsiveness vs.synergy
C.Portfolio organization vs.integrated organization
D.Markets vs.resources.

Answer 1

Responsiveness vs.synergy

Question 2

De Wit discusses the issue of corporate composition.Which of the following definitions refers best to this issue?
A.The search to find a balanced corporate control style
B.The question how to organize multi-business firms and their SBUs
C.The decision where to allocate resources, build up activities and try to achieve market sales
D.The balancing of multi-business firms between horizontal integration and diversification.

Answer 2

The decision where to allocate resources, build up activities and try to achieve market sales

Question 3

Goold and Campbell (1987) distinguish three general corporate control styles.Each of these styles emphasizes different levels of centralization, coordination and standardization.Which of the following do they NOT name?
A.Strategic control style
B.Financial control style
C.Strategic planning style
D.Financial planning style.

Answer 3

Financial planning style

Question 4

In the portfolio organization perspective, the main reason for a number of highly autonomous business units to be in one firm is to leverage_____________.
A.Financial resources
B.Operational resources
C.Financial activities
D.Operational activities

Question 5

What is the main issue to be addressed by corporate strategy?
A.Which businesses the corporation should be in, and how those businesses should relate to one another
B.If the corporation should develop long-term collaborative relationships with other firms, or build the resources it needs internally
C.How the individual SBU can be successful, and if success is more than just profitability
D.Who should control and coordinate the functions of the SBUs as they interact with one another.

Question 6

Much attention in the literature has been paid to 'internalization', or also called 'vertical integration'.De Wit mentions some conditions that are important when companies want to initiate this process.Which of the following is NOT mentioned?
A.Learning curve advantages
B.Increased bargaining power
C.Strategy congruence
D.Avoidance of transaction costs.

Question 7

The textbook presents the question of what the sources for synergy are.Rumelt (1974) states it has to do with:
A.Relatedness
B.Substitutes
C.Cooperation
D.Control.

Question 8

According to the textbook, corporate level strategy is dealing with the issue of corporate configuration of firms.What are the two main components of corporate configuration?
A.Corporate composition and corporate management
B.Corporate scope and corporate distribution
C.Corporate mechanisms and corporate management
D.Corporate control and corporate coordination.

Question 9

According to Porter (1987), entering into another business can only result in increased shareholder value, if three essential tests are passed.Porters 'five forces model' can be best compared to:
A.The diversity test
B.The attractiveness test
C.The cost-of-entry test
D.The better-off test.

Question 10

Which of the following aspects works in favour of a portfolio organization?
A.An umbrella brand
B.An inefficient stock market
C.A national favour of a mechanistic organization
D.All of the above

Question 11

"When Cor Boonstra took over as CEO of Philips Electronics in 1996 […], one of his first remarks to the business press was that Philips reminded him of 'a plate of spaghetti'…" According to the textbook, this statement refers to the fact that Cor Boonstra thought that Philips Electronics was:
A.Too focused on standardization and not paying attention to coordination
B.Too focused on control and not paying attention to cooperation
C.Too focused on responsiveness and not able to reap all the advantages of synergy
D.Too focused on synergy and not able to reap all the advantages of responsiveness.

Question 12

What is the most suitable way for company growth in the portfolio approach to corporate strategy?
A.Diversification through outsourcing
B.Networking
C.Diversification through internal growth
D.Diversification through acquisition.

Question 13

De Wit's text appoints three main areas of synergy potential.Which of the following is NOT mentioned?
A.Leveraging resources
B.Linking capabilities
C.Aligning positions
D.Integrating activities.

Question 14

Dealing with corporate level strategy, there are different types of portfolio matrices in use.De Wit discusses the most well-known: the Boston Consulting Group growth-share matrix, and the General Electric (GE) business screen.Which two factors are examined using the BCG matrix?
A.Corporate scope and corporate distribution
B.Industry attractiveness and competitive advantage
C.Relative competitive position and business growth rate
D.Competitive position and industry attractiveness.